Equity Fund

An equity fund is a fund that is focused on investment rather in stocks than in bonds. These funds are usually mutual funds, or it also may be an ETF. Equity funds may be divided into several categories according to a company's size, geography and the investment methods. The second name of such funds is stock funds.

Equity Funds nature

Equity funds have various peculiarities:

• Market capitalization defines the size of every equity fund.
• These funds may be categorized according to the investment style.
• Equity funds may be domestic and international. International equity funds are divided into regional and country funds.
• There are also specialized funds. Their goals are to pursue a certain sector in business, for instance, it may be real estate or health care.

The best way of investing

It’s widely known that investing in equity funds is the ideal investment vehicle for investors who don't have sufficient money to invest and who aren’t familiar enough with the world of shares and bonds since equity funds are highly practical.

To be more specific, portfolio diversification allows to diminish risk linked to investment and affordable prices allow people with small capital to purchase shares. When investing in separate shares it may cost investors much money to diversify their portfolio, however, this task is completed when investing in equity funds. Equity funds combine all investors’ money and thoroughly diversify the funds' securities.

Every equity fund has its own price, the price is estimated according to the fund's net asset value (NAV). The better the fund is diversified the less negative effect it will be affected by in case of falling of some stock prices.

There are also transparency and reporting requirements for equity funds, thus people managing the fund must be professionals with a vast experience in portfolio management. Their work experience isn’t a secret and everyone may see it.

Availability of Equity Funds

The best thing about equity funds is their availability. If we take a look at the mutual funds market, we’ll see a great picture. Among other mutual funds, equity funds have the biggest popularity. In 2017 there were a little less than 10,000 available funds. Investors may have very distinct investment objectives or risk profiles, they may also invest in exceedingly different sectors, such as technology or finance, they may choose every stock exchange that seems reliable to them, but in every way there are equity funds that will definitely meet their needs and demands.

There are different goals that equity funds want to pursue. For example, there are funds that focus on stocks from which it’s possible to get dividends, thus investing in blue-chip companies (it refers to reliable companies with a good reputation). There are also equity funds, which strive to grow capital and seek shares with rising prices.